The municipalities were promised half, when the government presented the new salmon tax with great fanfare on 28 September. What they talked about a little less was that “old” income was baked into the municipalities’ share, namely the production fee of 40 øre per kilo of fish. The fact that income equalization would further eat away at the new income the host municipalities were to receive was not a big issue either. news has based itself on basic figures from KS. KS’s calculations are based on the proposal the government has submitted for consultation. The table shows how much of the increased tax levied on the local aquaculture company will end up in the host municipality’s coffers. In addition, we show how many tax kroner this will amount to for each resident of the municipality. This is how we calculate what the municipalities will be left with. In the government’s proposal, it is planned to collect NOK 3.65 billion in the ground rent tax on aquaculture next year. Half, i.e. just over NOK 1.8 billion, will go to the “municipal sector”. The municipalities’ share is threefold. 1. Production fee 40 øre per kilo of slaughtered fish. It is proposed to be increased to 60 øre. The increase is included in the calculation as new tax revenue. The production fee is kept outside the income equalization between the municipalities. The aquaculture municipalities thus get to keep this. It is intended to provide NOK 750 million annually. 2. Natural resource tax. This tax becomes part of the income equalization system. Thus, a rich aquaculture municipality will have to give up 60 per cent of the tax. A poor aquaculture municipality will lose the equivalent of transfers. This tax will also amount to around NOK 750 million annually. 3. Increased subsidy to the municipal sector. The last 325 million needed for the municipal sector to receive half of the ground rent tax comes in the form of a grant. The grant is shared as other framework grants to the municipalities. This means that populous municipalities get the most. The aquaculture municipality’s increased tax revenue from the salmon tax then becomes: The increase in production tax + the natural resource tax after income equalization + increased framework subsidy from the ground rent tax. Demanding more locally The salmon tax of 40 per cent has met with strong opposition in the salmon industry. But not only among rich breeders. The tax has also met with strong opposition in the municipalities that house the farming companies. KS director Helge Eide Photo: Wilhelm Sverdvik / news – When the government has proposed that the municipal sector should receive approx. half of the income from ground rent on aquaculture, then it is primarily distributed to the municipal sector as a whole. So to all municipalities, says KS director Helge Eide. KS is the municipalities’ interest organization. – One in five kroner – often less. Is this a surprise to many? – Our national board has unanimously said that a larger share should benefit the host municipalities, says Eide. Vedum: will get more – The coastal municipalities will get more. It is absolutely certain, says Finance Minister Trygve Slagsvold Vedum (Sp). He points out that the salmon tax is under consultation. How it will finally be will not be clear until the summer. Therefore, he also believes that the calculation news has made on the basis of the government’s proposal and the current income system is misleading. – This autumn, only two decisions will be made. One is an increased transfer of NOK 800 million to the Aquaculture Fund. The second is increased production tax, says Vedum. Both parts mainly end up directly in the municipal coffers of the farming municipalities. But the 800 million is a one-off transfer for 2022 after the announcement of the salmon tax reduced the income from auctions of new licences. Vedum is also clear that he will ensure that the farming municipalities get more money next year. Both farmers and mayors have complained loudly since the salmon tax was presented. – Have the mayors complained unnecessarily? – No, I don’t mean that. There has been some uncertainty. We had a good mayor’s meeting last week, says Vedum. Must share An important reason why the coastal municipalities are left with quite a few extra tax dollars is called income equalization. This means that a medium-rich municipality only keeps 40 percent of increased tax revenue. For a poor municipality, even less is left because they lose almost as much income compensation as what they get in extra tax kroner. Delay Høyre is no longer in principle against ground rent tax on salmon. But they are opposed to taxes from the New Year. Helge Orten, parliamentary representative (H) Photo: Øyvind Sandnes / news – We believe that the government should, as a minimum, take the time to enter into a dialogue with the industry and the local communities along the coast to find a model that all parties can live with, says Conservative Helge The place. He points out that the host municipalities currently receive income from production fees and auctions of new salmon licences. – It is highly unclear whether the government’s new tax model provides more to the municipalities than the current distribution, since the income from the auction of new permits has been greatly reduced, says Orten” Read also:: The government under pressure: Open to change the salmon tax Vedum opens for less sharing As I said, the municipality does not have to share some income. They are kept out of the equalization between the municipalities. The production tax on slaughtered fish is one of these. – One input we have received is to add more of the tax to the production tax, says Vedum. The consultation deadline for the salmon tax, or ground rent tax on aquaculture as it is formally called, is 4 January. How the tax, which runs from the New Year, will finally look like will be clear in the summer. But Vedum and the government have been clear on one thing. The tax must be 40 percent. It comes on top of normal corporation tax of 22 percent.
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Salmon municipalities retain only one of six new tax kroner – news Norway – Overview of news from different parts of the country
